Recent Posts

These posts have been going through the EIA list of the top oil
producers in the world, over the past few weeks, I thought I
might just review them collectively, but briefly, before starting
to look at individual countries and oilfields. Even the posts
that I have written recently have become out of date with new
information (Russia increased production again in February by 20
kbd over January
reaching 10.23 mbd) and then fell back to
10.2 mbd in March but at this stage, rather than focusing on
such details, I am trying to generate a sense of the overall
picture.

It should also be recognized that I am just grabbing a snapshot
of data, rather than the more detailed studies that look at the
longer term, which folk such as Rembrandt, Rune and Euan provide.
The simplest way to do this is to place my current estimates of
production for the top 30 oil producers that I have reviewed in
this series against the EIA estimate of their production in 2009.

Top
30 oil producing countries (those increasing production over 2009
are shown in red).

It is significant to note that while Saudi Arabia was producing
8.05 mbd of crude in 2009, this has risen to 8.869 mbd on average
for February as the Kingdom increased production to match the
shortfalls in oil exports from Libya, inter alia. (With roughly
1.8 mbd in “other liquids” this takes total KSA production to
10.67 mbd and moves it back to the top of the League. However
those numbers were from the
March MOMR, which reports on February, In that report Libya
was still being recorded as producing around 1.3 mbd). It is now
reported that overall OPEC was not able to match the Libyan
decline in March, falling about
350 kbd short, while KSA production has now reached 9 mbd,
(10.8 including other liquids).

Contrary to President Obama’s
recent remarks the EIA are anticipating a decline in US crude
oil and liquids production over the next two years, part of which
has been blamed on the change in GOM regulations. As a result
it would be optimistic to anticipate much more than a US
production of 8.3 mbd (and the EIA project it will be down to 8.2
mbd next year). It is unlikely that US production will increase
beyond that point.

US
crude and liquid fuels production – (EIA)

With China, Iran, and Canada holding relatively steady in the
short term, this gives an updated total of 39.83 mbd for the top
six, which is about 1.4 mbd higher than when I wrote the initial
post back in February, but 500 kbd below the EIA estimate for
their 2009 production. (While Russia and the KSA increased, the
USA and Iran declined). Of these it is likely that only the KSA
can continue to increase production much more.

In the second tier, Mexican production continues to fall, and was
down to 2.556 mbd in February, with reports that it will now be
an oil importer well
before 2020. Exports have already fallen to 1.23 mbd, which
does not bode well for customers. The United Arab Emirates (UAE)
have, like the KSA, increased production to help out, though so
far this has only been up to 2.394 mbd from 2.3 mbd for most of
last year. (They also produce roughly another 500 kbd of other
liquid fuels). By 2020 they should be able to produce up to 3.5
mbd. And in similar vein Kuwait, now producing at 2.368 mbd, up
from 2,3 mbd. Kuwaiti plans are to reach 3.5 mbd by 2015, and be
at 4 mbd by 2020.

The current political turmoil has even persuaded Venezuela to
increase production, with OPEC reporting levels of 2.39 mbd for
February, a gain of around 100 kbd. Though how long that is
sustained depends on the success of the many investors that have
been persuaded to invest in the Venezuelan oil sands.

In the third group Norway is declining, being now at just over 2
mbd, and even though it has just announced a major
new discovery that will not come on line for at least 5 – 10
years, and in the meanwhile production will continue to fall.
Norway needs more discoveries similar to this, however, to be
able to sustain production levels extending into the future,
since without them
production will collapse.

Brazil was touted, by President Obama in his remarks about the
Energy Blueprint last week, though the increasing volumes of oil
that they will produce remain foreign to the United States, and
though they will likely increase production up to around 4 mbd by
2020, rising domestic consumption may well take much of that
increase.

Which brings us into the states that has some political turmoil.
Iraq has been able to bring production back to around 2.64 mbd
(according to OPEC) with the hope of reaching 3 mbd by the end of
this year. At the moment about 1.2 mbd of this is exported.
One of the great questions of the decade is just how close to a
projected 10 mbd by 2020 that Iraq will be able to get. Sadly the
continuing conflicts there, though reduced in scale, make it
difficult for me to see much beyond 5 mbd by 2020.

Nigeria, which has had its own internal conflicts for some time,
is going to the polls as I write this, and the expected winner is
planning to
overhaul the oil industry. However, if stability continues,
then it might be possible to resurrect some of the older fields
and perhaps increase overall production by some 350 kbd.

Algeria, which has had some turmoil, but may emerge from the
ongoing protests without much change, is producing around 2 mbd
of liquids. That has not changed as OPEC has moved to match the
decline in volumes from Libya and other countries facing
protests, and may reflect the current maximum that the country
can produce. In the stability stakes I suspect that Algeria may
survive without much change, although the plot I put up from
Energy Export Databrowser does suggest that production may have
peaked.

Algerian oil statistics (Energy Export
Databrowser)

Angola is currently producing 1.7 mbd but may add some 650 kbd
this year, for a total of 2.35 mbd. And that brings us to Libya,
where the increased fighting, particularly over the oil refinery
town of Ras Lanuf, makes it increasingly unlikely that the
1.7 mbd which came from Libya will be available again soon.

The United Kingdom is in significant decline, but recent moves to
further tax the oil industry have made it possible that the
decline may steepen. This because the new taxes proposed will
likely reduce the profitability of the field developments
proposed,
discouraging their development. Recently production has run
at 1.35 mbd of liquids, which is scheduled to drop to 1.3 mbd
this year, and 0.94 mbdoe of natural gas, anticipated to fall to
0.85 mbdoe this year. The criticality of investment is shown in
the projected production over the next 5 years, with the
different colors showing the likelihood of success. Note that the
grey of current production is declining at about 10%.

Moving to the next tier down, Kazakhstan is now at 1.6 mbd and
slowly increasing production toward a target of 3 mbd by 2020.
Qatar is running at 1.4 mbd, but with almost 0.6 mbd of that in
NGL. Indonesia is producing right around 1 mbd and may maintain
that in the short term. It is being challenged in rank by
Azerbaijan which has just incremented up to 1 mbd, a volume that
is expected to continue to rise until it reaches about 1.25 mbd
in 2014.

The tier that lies below 1 mbd starts with India, which is
currently holding a production of around 878 kbd, and having to
import increasing amounts of oil to meet demand. Given that the
country also subsidizes the price, this is becoming an
increasingly expensive consideration for the government.
India is followed by Argentina, which is post peak and declined
to 0.76 mbd most recently. Egypt is similarly declining, now to
660 kbd, but as one of the early nations to change under the most
recent protests, and with the situation still somewhat fluid, it
is difficult to predict how much the country will have both for
itself, and for external customers, a year from now.

Oman will likely weather the current storms, and is also
increasing oil production, to the point that it is moving up to
pass India, with an Omani production of 863 kbd, some of which is
tied to NGL production.

In the final four that produce more than 500 kbd Malaysia is
barely maintaining production at 700 kbd, while Australia has
fallen from 588 kbd to 540 kbd. Both are now being passed in
production by Colombia, one of the “hotter” places for
development at the moment, with production rising to possibly
920 kbd this year. Ecuador, which closes out the top 30, has
recently increased production from 485 to
504 kbd.

That completes the top 30, and accounts for some 76.7 mbd of
production. Those same countries back in 2009 were reported by
the EIA as producing some 79.23 mbd of oil. Remember that world
demand is anticipated to increase by somewhere between 1.4 and
1.6 mbd this year, and that of this list of 30 only 13 increased
production, and the rest declined and the concern for the future
becomes thus more clearly defined. (The difference between the
two totals is partially explained by the loss in Libyan oil - we
will see within the month how well OPEC covers that).

But it is not the overall production from the world that can be
estimated that accurately, but by looking at individual countries
and, in some cases, individual oilfields that we can get some
better sense of what is to come. So the next step will be looking
at these nations in more detail, in the weeks ahead.